The Decision examined the first round of integrated resource plans filed by each of the load-serving entities subject to CPUC jurisdiction. The Decision approved the plans filed by 20 load-serving entities, found that another eight load-serving entities were not required to file integrated resource plans, and found that 19 plans were insufficient as they failed to address criteria pollutant issues. One load-serving entity—Commercial Energy of California, an energy service provider—failed to file an integrated resource plan at all. The Decision also provides specific guidance for plan development for each load-serving entity for the next IRP cycle.

CPUC staff also aggregated all of the resource plans into a single portfolio—after certain adjustments to render it feasible—defined as the Hybrid Conforming Portfolio, or HCP. Adjustments were necessary to ensure that the consolidated new resource procurement proposals did not exceed resource potential in a geographic area or existing transmission availability. Commission staff identified four regions where the proposed new wind resources exceeded assumed resource potential (Northern California, Solano, Southern California Desert, and Riverside East Palm Springs). Where resource potential was exceeded, staff adjusted the resources to come from nearby regions. There were also five regions where the proposed renewable buildout appeared to exceed assumed available transmission capacity (Central Valley North Los Banos, Greater Carrizo, Southern California Desert, Northern California, and Solano). Adjustments were made in these regions by converting the proposed projects to energy-only, or moving resources to nearby locations when transmission assumptions were exceeded. No resource selections for out-of-state resources that required transmission upgrades, however, were adjusted based on transmission limitations. The Decision requires load-serving entities to disclose the contractual and development status of their resource selections in future IRPs, in order to help avoid adjustment issues in the future, and to provide an updated filing with that information to the CPUC by August 16, 2019.

The HCP also assumes a 40-year life for fossil-fuel resources, absent an existing contract extending beyond that 40-year period.

The Decision finds, however, that the HCP is deficient as compared to the Reference System Portfolio, or RSP, that the CPUC adopted in its prior Decision 18-02-018, adjusted to incorporate the most recent assumptions from the California Energy Commission’s 2017 Integrated Energy Policy Report (“IEPR”) (the RSP had originally been based on assumptions from the 2016 IEPR). The HCP had higher greenhouse gas emissions than the RSP, and did not meet the CPUC’s greenhouse gas emissions goals. The Decision also found that the HCP offered less reliability than the RSP. Finally, the HCP also did not appear to come close to achieving the 60% RPS requirements in 2030, although the IRPs were submitted prior to that requirement becoming law as a result of SB 100.

The Decision adopted a modified version of the RSP, defined as the preferred system portfolio, or PSP, which is an updated version of the RSP, to include the 2017 IEPR assumptions and including an assumption of a 40-year life for fossil-fuel-fired generation.

The Decision recommended that the PSP be used by the CAISO in its 2019-2020 Transmission Planning Process as both the reliability and the policy-driven base cases, along with two sensitivities, one that assumed the majority of renewable development would be in-state, while the second would assume a substantial amount of out-of-state procurement, primarily wind from Wyoming and New Mexico.

The Decision finds that achieving the PSP by 2030 will require concrete procurement of specific resources, especially by community choice aggregators to meet their growing load. The Decision also notes the need for near- and medium-term reliability planning as part of the IRP process. For that reason, the Decision opens a “procurement track” to explore options for facilitating procurement for existing and new resources that may be necessary to maintain reliability or facilitate renewable integration. The procurement track will be focused on two types of procurement. First, it will focus on “backstop” procurement, in the event that load-serving entities fail to procure the resources identified in their IRPs as necessary to fulfill their responsibilities for procurement. Second, the procurement track will focus on procurement that may require collective action by multiple load-serving entities.

The Decision also requires that load-serving entities in Pacific Gas and Electric’s service territory include in their next IRP a section explicitly addressing replacement energy for Diablo Canyon with similar characteristics.

]]>https://www.lawofrenewableenergy.com/2019/05/articles/california/recent-california-public-utilities-commission-decision-charts-path-forward-for-its-irp-proceeding/feed/0https://www.lawofrenewableenergy.com/2019/05/articles/california/recent-california-public-utilities-commission-decision-charts-path-forward-for-its-irp-proceeding/FERC Reaffirms Concurrent Jurisdiction Over PPAs in Bankruptcyhttp://feeds.lexblog.com/~r/RenewableLaw/~3/bN29jfK5U08/
https://www.lawofrenewableenergy.com/2019/05/articles/ferc/ferc-reaffirms-concurrent-jurisdiction-over-ppas-in-bankruptcy/#respondThu, 02 May 2019 20:26:12 +0000https://www.lawofrenewableenergy.com/?p=5848Continue Reading]]>The Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued an order on May 1, 2019 denying rehearing of its orders asserting concurrent jurisdiction with a bankruptcy court over wholesale power contracts.

In January, prior to Pacific Gas & Electric (“PG&E”) filing for bankruptcy, NextEra Energy, Inc. and Exelon Corporation both filed complaints and petitions for declaratory orders from FERC, requesting that the Commission find that PG&E could not abrogate, amend, or reject in a bankruptcy proceeding any rates, terms, and conditions of its FERC-jurisdictional wholesale power contracts without first obtaining approval from the Commission. The Commission quickly issued a brief order holding that a party to a FERC-jurisdictional wholesale power contract must obtain approval from both the bankruptcy court and the Commission to reject a contract and modify the filed rate, respectively. PG&E then filed its petition for bankruptcy and initiated an adversarial proceeding against FERC, requesting preliminary and injunctive relief. That matter has continued to play out in the Northern District of California and there has not yet been a resolution by the bankruptcy court. Meanwhile, PG&E requested rehearing of the Commission’s decision. The Commission’s order on rehearing offers a more in-depth analysis of its jurisdiction.

The order first highlights the distinct roles that FERC and a bankruptcy court play in evaluating wholesale power contracts. While FERC’s role is to protect the public interest, the bankruptcy court’s role is to provide a path to rehabilitate debtors. The Commission held that the existence of bankruptcy proceedings does not alter its obligation, and exclusive authorization, to consider whether wholesale rates are just and reasonable.

FERC rejected PG&E’s assertion that its assertion of concurrent jurisdiction creates a conflict, reasoning that there is no inherent conflict in the Commission and bankruptcy’s court different processes and that the Bankruptcy Code specifically contemplates regulatory approvals in Section 1129(a)(6). FERC concluded that “a bankruptcy court’s authorization to reject a wholesale power contract does not relieve the debtor of its separate regulatory obligations under the FPA.”

FERC also dismissed PG&E’s argument that the rejection of a contract is no different than a breach of contract and, unlike an abrogation, does not change the contract’s terms. The Commission explained that: “rejection of a wholesale power contract amounts to more than a simple breach in the typical sense, in that rejection is a court-authorized breach that may result in the complete cessation of performance under the contract. It would eviscerate the Commission’s exclusive jurisdiction under the FPA to hold that rejection of a wholesale power contract permits the unilateral termination of a regulatory obligation by the debtor.” FERC stated that, in the absence of a contract clause permitting unilateral modification, its review of a complaint seeking to modify contract rates would center on whether the Mobile-Sierra presumption applies and, if so, whether modification would be required by the public interest. This analysis would be the same whether or not the entity was in bankruptcy.

The Commission rejected PG&E’s argument that it had alternative and less disruptive means to protect its jurisdiction than asserting concurrent jurisdiction. FERC held that asserting concurrent jurisdiction “such as to require approval from both the bankruptcy court and the Commission,” ensured that FERC would “have an opportunity to review any attempt to modify the filed rate.” FERC rejected arguments that it strayed from its precedent, explaining that the split among federal courts has given it the opportunity to reevaluate its position.

Finally, the Commission explained that while regulatory obligations under the FPA generally fall on the seller of wholesale power and the Commission would not command a purchaser to purchase power, it does have authority to enforce the filed rate and order purchasers to continue to perform under the contracts (unless the purchaser establishes that the contract harms the public interest or the Mobile-Sierra presumption otherwise does not attach to the contract).

PG&E now has the ability to appeal FERC’s order to a federal court of appeals within 60 days.

]]>https://www.lawofrenewableenergy.com/2019/05/articles/ferc/ferc-reaffirms-concurrent-jurisdiction-over-ppas-in-bankruptcy/feed/0https://www.lawofrenewableenergy.com/2019/05/articles/ferc/ferc-reaffirms-concurrent-jurisdiction-over-ppas-in-bankruptcy/Electric Vehicles and Zero Emission Transportation Related Bills Introduced in the 2019-2020 Legislative Sessionhttp://feeds.lexblog.com/~r/RenewableLaw/~3/PfFMxB1ShHk/
https://www.lawofrenewableenergy.com/2019/03/articles/california/electric-vehicles-and-zero-emission-transportation-related-bills-introduced-in-the-2019-2020-legislative-session/#respondThu, 21 Mar 2019 22:53:34 +0000https://www.lawofrenewableenergy.com/?p=5845Continue Reading]]>February 22, 2019 marked the deadline by which bills could be introduced for the first half of the 2019-2020 California Legislative Session. More than 1,800 Assembly Bills and nearly 800 Senate bills were introduced; among them, legislation focused on the electrification of vehicles and the infrastructure for charging them.

Below is a list of some of the key bills Stoel Rives’ Energy Technology Working Group will be monitoring throughout the Legislative Session. We note that some bills do not contain language beyond the “intent of the Legislature.” These bills are set forth separately below under the heading “Legislative Intent.” In addition, some bills identify non-substantive, technical revisions. However, we will continue to monitor these bills in case of substantive amendments.

Key Upcoming Dates: Lawmakers will begin Spring Recess April 12 and reconvene April 22. The last day for bills to be passed out of the house of origin is May 31, 2019.

AB 40 (Ting, D) Zero-emission vehicles: comprehensive strategy.Status: Introduced December 3, 2018; referred to Assembly Committees on Transportation and Natural Resources January 24, 2019.AB 40 would require by no later than January 1, 2021, the California Air Resources Board (CARB) to develop a comprehensive strategy to ensure that the sales of new motor vehicles and new light-duty trucks in the state have transitioned fully to zero-emission vehicles, as defined, by 2040, as specified.

AB 753 (Garcia, D) alternative and Renewable Fuel and Vehicle Technology Program: fuels: fueling infrastructure.Status: Introduced February 19, 2019; referred to Assembly Committee on Transportation February 28, 2019Existing law establishes the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007, which includes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the State Energy Resources Conservation and Development Commission (Energy Commission), and the Air Quality Improvement Program, administered by CARB.

This bill would require the Energy Commission to make available at least 30 percent of the moneys available for allocation as part of the Alternative and Renewable Fuel and Vehicle Technology Program for projects to produce alternative and renewable low-carbon fuels in the state, as specified, and projects to develop stand-alone alternative and renewable fuel infrastructure, fueling stations, and equipment, as specified.

AB 983 (Boerner Horvath, D) Transportation electrification.Status: Introduced February 21, 2019; referred to Assembly Committees on Utilities and Energy and Communications and Conveyance March 7, 2019.Under existing law, the California Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations. Existing law, enacted as part of the Clean Energy and Pollution Reduction Act of 2015, requires the PUC, in consultation with the Energy Commission and CARB, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050. That law requires that the programs proposed by electrical corporations seek to minimize overall costs and maximize overall benefits. The PUC is required to approve, or modify and approve, programs and investments in transportation electrification, including those that deploy charging infrastructure, through a reasonable cost recovery mechanism, if they are consistent with the above-described purposes, do not unfairly compete with nonutility enterprises, include performance accountability measures, and are in the interests of ratepayers. This bill would, among other things:

require an electrical corporation to work with local agencies or regional planning agencies in its service territory with responsibility for planning electric vehicle deployment to determine where to install new electrical charging stations along local transit corridors;

authorize an electrical corporation to file an application with the PUC by December 31, 2020, with the support of the local or regional planning agency, for the infrastructure investments required to support electrical charging stations at transit corridor entry and exit points or other locations;

require the application to prioritize the installment of charging stations in disadvantaged communities, as defined;

require the PUC to review, modify, if appropriate, and decide whether to approve an application filed by an electrical corporation and supported by the local or regional planning agency;

authorize an electrical corporation to propose a cost allocation methodology that allocates costs in a reasonable manner and would require the PUC to approve the cost allocation methodology if the commission finds that the application would minimize overall costs and maximize overall benefits and is in the interests of ratepayers;

require that the charging stations be installed by the utility workforce, or by workers who are paid the prevailing wage for all program-related work.

AB 1100 (Kamlager-Dove, D) Electric vehicles: parking requirements.Status: Introduced February 21, 2019; referred to Assembly Committee on Local Government March 11, 2019The Planning and Zoning Law, among other things, requires the legislative body of each county and city to adopt a general plan for the physical development of the county or city and authorizes the adoption and administration of zoning laws, ordinances, rules, and regulations by counties and cities. AB 1100, as introduced, contains other existing laws and, in summary, would:

require a parking space served by electric vehicle service equipment, as defined, and a parking space designated as a future electric vehicle charging space, as defined, to be counted as at least one standard automobile parking space for the purpose of complying with any applicable minimum parking requirements established by a local jurisdiction; and,

require a van-accessible parking space served by electric vehicle service equipment and a van-accessible parking space intended as a future electric vehicle charging space to be counted as at least two standard automobile parking spaces for the purpose of complying with any applicable minimum parking requirements established by a local jurisdiction.

AB 1411 (Reyes, D) Integrated action plan for sustainable freight.Status: Introduced February 22, 2019; referred to Assembly Committee on Transportation March 14, 2019.Existing law requires CARB to submit to the Legislature a report with policy recommendations for increasing the use of light-duty, medium-duty, and heavy-duty zero-emission vehicles in the state that includes, among other things, recommendations as to how vehicle fleet operators can increase the number of zero-emission vehicles in vehicle fleet use. Existing law creates the California Clean Truck, Bus, and Off-Road Vehicle and Equipment Technology Program to fund development, demonstration, pre-commercial pilot, and early commercial deployment of zero- and near-zero-emission truck, bus, and off-road vehicle and equipment technologies, with priority given to projects benefiting disadvantaged communities, as provided. If signed into law, AB 1411 would:

establish as a state goal the deployment of 200,000 zero-emission medium- and heavy-duty vehicles and off-road vehicles and equipment, and the corresponding infrastructure to support them, by 2030;

require the PUC, CARB, the Department of Transportation, the Energy Commission, and the Governor’s Office of Business and Economic Development to develop and update by January 1, 2021, and at least every five years thereafter, an integrated action plan for sustainable freight that identifies strategies relating to that state goal, with priority given to actions that significantly reduce air pollution in low-income communities, as defined, and disadvantaged communities, as identified by the California Environmental Protection Agency.

AB 1594 (Bauer-Kahan, D) Vehicular air pollution: Zero-Emission Vehicle Incentive Program.Status: Introduced February 22, 2019; awaiting referral.Existing law requires CARB, in conjunction with the Energy Commission, to develop and administer a program to provide grants to individuals, local governments, public agencies, nonprofit organizations, and private businesses, to encourage the purchase or lease of a new zero-emission vehicle. This bill would make a non-substantive change to that provision.

AB 1621 (Frazier, D) Alternative and Renewable Fuel and Vehicle Technology Program.Status: Introduced February 22, 2019; awaiting referral.Existing law establishes the California Alternative and Renewable Fuel, Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007, which includes the Alternative and Renewable Fuel and Vehicle Technology Program, administered by the Energy Commission, and the Air Quality Improvement Program, administered by CARB. Existing law requires the Alternative and Renewable Fuel and Vehicle Technology Program to provide funding measures to certain entities to develop and deploy innovative technologies that transform California’s fuel and vehicle types to help attain the state’s climate change policies. Existing law requires the state board to give preference to those projects that maximize the goals of the program based on specified criteria. This bill would make a technical, non-substantive change to those provisions.

AB 1655 (O’Donnell, D) Hydrogen-fueled vehicles.Status: Introduced February 22, 2019; awaiting referral.Existing law, until January 1, 2024, requires the CARB to annually aggregate and make available information on the number of hydrogen-fueled vehicles that motor vehicle manufacturers project to be sold or leased over the next 3 years and the total number of hydrogen-fueled vehicles registered with the Department of Motor Vehicles through April 30. Existing law, until January 1, 2024, requires the state board, based on that information, to evaluate the need for additional publicly available hydrogen-fueling stations, as specified, and report findings to the Energy Commission on the need for additional publicly available hydrogen-fueling stations, as specified. This bill would make technical, non-substantive changes to that provision.

SB 400 (Umberg, D) Reduction of greenhouse gases emissions: mobility options.Status: Introduced February 20, 2019; set for hearing before the Senate Committee on Environmental Quality, April 3, 2019.Existing law establishes the Clean Cars 4 All Program, which is administered by CARB to focus on achieving reductions in the emissions of greenhouse gases, improvements in air quality, and benefits to low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option. Existing law defines specified terms, including “mobility option”, which means a voucher for public transit or car sharing for purposes of the program. This bill would additionally provide that “mobility option” also includes bike sharing and electric bicycles.

LEGISLATIVE INTENT BILL

AB 1238 (Cunningham, R) Electric vehicle charging stations.Status: Introduced February 21, 2019; referred to Assembly Committee on Transportation.Under existing law, PUC has regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law requires the PUC, in consultation with the Energy Commission, CARB, electrical corporations, and the motor vehicle industry, to evaluate policies to develop infrastructure sufficient to overcome any barriers to the widespread deployment and use of plug-in hybrid and electric vehicles and, by July 1, 2011, to adopt rules that address specified issues. Existing law further requires the PUC, in cooperation with the Energy Commission, CARB, air quality management districts and air pollution control districts, electrical and gas corporations, and the motor vehicle industry, to evaluate and implement policies to promote the development of equipment and infrastructure needed to facilitate the use of electric power and natural gas to fuel low-emission vehicles. Existing law, enacted as part of the Clean Energy and Pollution Reduction Act of 2015, requires the PUC, in consultation with the Energy Commission and CARB, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050. This bill would state the intent of the Legislature to enact legislation to encourage business owners to build onsite electric vehicle charging stations.

Direct Access permits customers of a California investor-owned utility (“IOU”) (e.g., Pacific Gas and Electric, San Diego Gas and Electric, Southern California Edison) to obtain their electricity from an electric service provider registered with the CPUC. The IOU continues to provide transmission and distribution service to the customer. Direct access was instituted in 1998 as part of California’s efforts to deregulate the electric sector.

As part of California’s efforts to recover from the energy crisis in 2000-2001, the California legislature passed Assembly Bill 1X (“AB1X”), which authorized the Department of Water Resources (“DWR”) to begin procuring electricity on behalf of IOU customers, and required the CPUC to allow DWR to recover the costs of such procurement from IOU ratepayers. AB1X also authorized the CPUC to suspend Direct Access, motivated by a concern that IOU ratepayers would flee to Direct Access to avoid paying the cost of DWR procurement.

The CPUC suspended direct access as of September 20, 2001, barring any new contracts for Direct Access service, while permitting current Direct Access customers to remain on Direct Access. Over the years, the CPUC refined the rules governing when customers could select Direct Access service, but the number of customers that are permitted to select Direct Access service has remained capped. Senate Bill 695, passed in 2009, authorized the CPUC to allow additional Direct Access service, up to a total kilowatt hour annual limit.

Last year, the California Legislature passed Senate Bill 237, which requires the CPUC, on or before June 1, 2019, to issue an order which increases the annual Direct Access limit by a total of 4,000 gigawatt hours, apportioned among IOU service territories. SB 237 also requires the Commission, on or before June 1, 2020, to provide recommendations to the legislature about a schedule for reopening Direct Access for all remaining nonresidential customer accounts.

The rapid increase in community choice aggregators (“CCA”), and the growth of distributed energy resources, has already led to a huge increase in the percentage of California load that receives electricity from sources or entities other than the IOUs. Projections are that 40% of PG&E’s load will obtain electricity from other sources by the end of this year. Given that trend, a cap on Direct Access will not prevent the continued migration of load to suppliers other than the IOUs, and the original justification for suspending direct access, in order to prevent customers from leaving IOU service to avoid paying DWR costs, no longer exists.

The load migration trends may lead to IOUs becoming “wires only” utilities, providing only transmission and distribution service, and getting out of the electricity procurement business entirely. That option has been raised with increasing frequency recently, including by IOUs, as well as in connection with the potential restructuring of PG&E as a result of its recent bankruptcy filing.

The increasing number of load serving entities in California, however, has also raised concerns about reliability. Each load serving entity is required to procure a certain amount of capacity to meet resource adequacy requirements. Ensuring that load serving entities procure the required amount of resource adequacy capacity becomes more complicated as procurement becomes more fragmented as a result of the rapid increase in the number of load serving entities. The CPUC is also currently struggling with that issue in its resource adequacy proceeding.

The Direct Access OIR proposes a preliminary schedule that would include an opportunity to comment on the OIR due fifteen days from the issuance of the OIR, reply comments due five days from the comment due date, and a prehearing conference on April 4, 201,9, with a workshop to follow on April 9. The OIR projects that a decision will be voted out at the CPUC’s May 30, 2019 voting meeting.

]]>https://www.lawofrenewableenergy.com/2019/03/articles/regulation/california-public-utilities-commission-opens-rulemaking-to-consider-expansion-of-direct-access/feed/0https://www.lawofrenewableenergy.com/2019/03/articles/regulation/california-public-utilities-commission-opens-rulemaking-to-consider-expansion-of-direct-access/CAISO Proposes Second Set of Resource Adequacy Enhancements – Aims to Reduce Reliance on Resource Adequacy Availability Incentive Mechanism (RAAIM)http://feeds.lexblog.com/~r/RenewableLaw/~3/8lmC_s7rm_Q/
https://www.lawofrenewableenergy.com/2019/03/articles/california/caiso-proposes-second-set-of-resource-adequacy-enhancements-aims-to-reduce-reliance-on-resource-adequacy-availability-incentive-mechanism-raaim/#respondThu, 07 Mar 2019 18:37:18 +0000https://www.lawofrenewableenergy.com/?p=5837Continue Reading]]>The CAISO recently issued Part 2 of its Resource Adequacy Enhancements Straw Proposal and stakeholders met with the CAISO this week to discuss the paper and get further clarifications on the initial skeletal structure provided.

As part of the process, the CAISO reviewed the counting rules in other ISO/RTOs and found that most ISO/RTOs use the effective forced outage rate of demand, or the probability that a resource will be unavailable due to forced outages or forced deratings when there is demand on the unit to operate, to assess resource availability up front. The CAISO plans to take from the best practices, including a review of resources’ forced outage rates to include in RA valuation and ultimately reduce the reliance on RAAIM. The CAISO’s admittedly ambitious schedule aims to wrap up the policy development and get board approval by the end of the year, anticipating implementation for RA year 2021.

The proposal includes three main topics:

(1) RA counting rules and assessments: The CAISO proposes a new framework that assesses the forced outage rates for resources and is considering how to incorporate these rates in RA assessments. The CAISO is not proposing to adjust NQC, as this will still be important for local RA assessments and studies and must offer obligations, but to also annually publish unforced capacity (UCAP) values, or the installed capacity that is not on average experiencing a forced outage or derating. The intention is to develop RA rules that incentivize the procurement of reliable resources rather than only the cheapest and to encourage showing all RA capacity that is under RA contract, as opposed to the minimum amount as is currently incentivized under the RAAIM framework. The CAISO is exploring options to develop UCAP for all resource types that do not rely on ELCC methodology (solar and wind), as it intends to rely on CPUC ELCC methodology where applicable. Proposals will be included in the revised straw proposal.

Additionally, the CAISO continues to explore a new planned outage substitution concept where planned outages will not be required to provide substitute capacity if LSE’s available unforced capacity exceeds the minimum UCAP threshold. Further, the CAISO believes it is possible to eliminate forced outage substitution as UCAP values will provide incentives for timely maintenance and quick repairs. Resources shown for RA capacity will continue to have a must offer obligation.

(2) Backstop capacity procurement: The CAISO’s proposal includes three pathways for new CPM authority for individual deficiencies including (a) LSE specific UCAP test (b) system UCAP test and (c) capacity incentive mechanism. The CAISO may also modify the competitive solicitation process to implement it with daily granularity as it may be used to allow scheduling coordinators to backstop planned outages in the future.

(3) RA import capability provisions: The CAISO is evaluating whether the current allocation process timing causes barriers for new LSEs beginning operations and commencing RA compliance. It will also consider potential enhancements to the Available Import Capability Assignment including (a) considering modifications to allow for release and relocation or transfer of unused import capability after initial monthly RA showings (b) incorporating an auction or other market based mechanism and (c) enhancing the provisions for reassignment, trading, or other forms of sales of import capability among LSEs.

The CAISO is accepting comments on these proposals until March 20 and anticipates posting a revised straw proposal on May 20.

As always, our attorneys can provide counsel regarding the impact of the proposed changes on your business and work with you to participate in this process.

]]>https://www.lawofrenewableenergy.com/2019/03/articles/california/caiso-proposes-second-set-of-resource-adequacy-enhancements-aims-to-reduce-reliance-on-resource-adequacy-availability-incentive-mechanism-raaim/feed/0https://www.lawofrenewableenergy.com/2019/03/articles/california/caiso-proposes-second-set-of-resource-adequacy-enhancements-aims-to-reduce-reliance-on-resource-adequacy-availability-incentive-mechanism-raaim/Key Energy Related Bills Introduced in the 2019-2020 Legislative Sessionhttp://feeds.lexblog.com/~r/RenewableLaw/~3/3mDHhaWb2kI/
https://www.lawofrenewableenergy.com/2019/03/articles/california/key-energy-related-bills-introduced-in-the-2019-2020-legislative-session/#respondTue, 05 Mar 2019 17:33:09 +0000https://www.lawofrenewableenergy.com/?p=5828Continue Reading]]>The 2019-2020 California Legislative Session has reached its first deadline. February 22, 2019 marked the deadline by which bills could be introduced for the first half of the Legislative Session. Lawmakers will begin Spring Recess April 12 and reconvene April 22. The last day for bills to be passed out of the house of origin is May 31, 2019.

Below is a list of some of the key bills Stoel Rives’ Energy Team will be monitoring throughout the Legislative Session. We note that some bills do not contain language beyond the “intent of the Legislature.” However, we will continue to monitor these bills in case of substantive amendments. These bills are set forth separately below under the heading “Legislative Intent.”

The majority of the bills introduced this Legislative Session relate in some way to California’s efforts to reduce greenhouse gas emissions and move to cleaner sources of generation, including legislation governing electric vehicles, energy storage, and renewable energy. A number of bills introduced in February also attempt to address the impacts of wildfires, or to reduce wildfire risk.

ASSEMBLY BILLS

AB 40 (Ting, D) Zero-emission vehicles: comprehensive strategy.

Status: Introduced December 3, 2018; referred to Committees on Transportation and Natural Resources January 24, 2019.

AB 40 would require by no later than January 1, 2021, the State Air Resources Board to develop a comprehensive strategy to ensure that the sales of new motor vehicles and new light-duty trucks in the state have transitioned fully to zero-emission vehicles, as defined, by 2040, as specified.

Current law requires the Public Utilities Commission (“PUC”) and the State Energy Resources Conservation and Development Commission (“Energy Commission”) to undertake various actions in furtherance of meeting the state’s clean energy and pollution reduction objectives. This bill would require the PUC and the Energy Commission to provide to the Legislature, by March 31, 2020, a joint assessment of options for establishing a central statewide entity to procure electricity for all end-use retail customers in the state.

Status: Introduced January 9, 2019; last amended February 25, 2019; referred to Committee on Natural Resources February 26, 2019

The California Alternative Energy and Advanced Transportation Financing Authority Act authorizes, until January 1, 2021, the California Alternative Energy and Advanced Transportation Financing Authority to provide financial assistance in the form of a sales and use tax exclusion for projects, including those that promote California-based manufacturing, California-based jobs, advanced manufacturing, reduction of greenhouse gases, or reduction in air and water pollution or energy consumption. The act prohibits the sales and use tax exclusions from exceeding $100,000,000 for each calendar year. This bill would extend the authorization to provide financial assistance in the form of a sales and use tax exclusion for qualifying projects and also would extend the sales and use tax exclusion until January 1, 2031.

AB 235 would create the California Wildfire Catastrophe Fund Authority, which would be governed by a board of directors. The bill would 1) authorize electrical corporations and local publicly owned electric utilities to participate in the authority; 2) require each participating entity to make an initial contribution and annual contributions to the authority; and, 3) require the board to deposit those contributions into an account dedicated to receiving contributions from that participating entity. Upon a participating entity incurring costs relating to a wildfire and submitting a claim for those costs to the board, the bill would require the board to reimburse the participating entity for those costs, as specified, and would require the board to determine if the participating entity will be required to make increased annual contributions over a specified period of years to make the authority’s applicable contribution pool whole. This bill would authorize the board to take specified actions, including to issue bonds payable from, and secured by, a pledge of the board of all or any part of the contributions to the authority to finance claims by participating entities, as specified, and to sell those bonds at public or private sale. To pay a participating entity’s claim, the bill would require the board, if it determines it to be just and reasonable to do so, to secure a bond by a pledge of all or any part of the participating entity’s annual contributions.

AB 915 (Mayes, R) California Renewables Portfolio Standards Program.

Status: Introduced February 20, 2019; awaiting referral.

AB 915 would require that retail sellers and local publicly owned electric utilities procure a minimum quantity of electricity products from eligible renewable energy resources so that the total kilowatt-hours of those products sold to their retail end-use customers achieve 68 percent of retail sales by December 31, 2033, 76 percent by December 31, 2036, and 80 percent by December 31, 2038. The bill would revise the definition of “eligible renewable resource” for purposes of the program to include, on and after January 1, 2026, an electrical generation facility that has a specified point source emission level of carbon dioxide equivalent at, or below, a specified level, if the marginal increase in the cost of procurement from other eligible renewable energy resources exceeds a specified level.

AB 1371 would require the PUC to determine appropriate targets for the procurement of offshore wind generation on behalf of retail end-use customers of retail sellers in California in order to meet the goals that eligible renewable energy resources supply 60 percent of retail sales of electricity to California end-use customers by December 31, 2030, and that eligible renewable energy resources and zero-carbon resources supply 100 percent of retail sales of electricity to California end-use customers and 100 percent of electricity procured to serve all state agencies by December 31, 2045.

AB 1411 (Reyes, D) Integrated action plan for sustainable freight.

Status: Introduced February 22, 2019; awaiting referral.

AB 1411 would establish as a state goal the deployment of 200,000 zero-emission medium- and heavy-duty vehicles and off-road vehicles and equipment, and the corresponding infrastructure to support them, by 2030. The bill would require the PUC, the state board, the Department of Transportation, the State Energy Resources Conservation and Development Commission, and the Governor’s Office of Business and Economic Development to develop and update by January 1, 2021, and at least every five years thereafter, an integrated action plan for sustainable freight that identifies strategies relating to that state goal.

Status: Introduced February 12, 2019; referred to Committee on Energy, Utilities, and Communications February 22, 2019.

Current law directs the PUC to require every electrical corporation, gas corporation, water corporation, wireless telecommunications service provider, and telephone corporation with annual gross revenues exceeding $25,000,000, and their regulated subsidiaries and affiliates, to annually submit a detailed and verifiable plan for increasing procurement from women, minority, disabled veteran, and LGBT business enterprises, as defined, in all categories, including renewable energy projects, as defined, and wireless telecommunications, broadband, smart grid, and rail projects. Existing law requires the reporting of certain information about the implementation of the plans. SB 255 would extend these requirements to electric service providers, community choice aggregators, and energy storage system companies, as defined, and would change the $25,000,000 annual gross revenue threshold above which these requirements become applicable to $1,000,000 in gross annual California revenues.

SB 288 (Wiener, D) Electricity: self-generation and storage.

Status: Introduced February 13, 2019; referred to Committee on Energy, Utilities, and Communications February 21, 2019.

SB 288 would require by January 1, 2021 the PUC and the governing board of each local publicly owned electric utility to, among other things, create one or more tariffs that offer fair compensation for customer-sited energy storage systems that export electricity to the electrical grid and to consider one or more tariffs for customer-sited energy storage and renewable energy systems to support grid reliability and community resiliency in the event of emergencies or grid outages.

Pursuant to current law, the PUC has adopted resolutions establishing fuel or feedstock procurement requirements for generation from bioenergy projects intended to reduce wildfire risks that are applicable to the state’s 3 largest electrical corporations. SB 515 would expand the fuels and feedstocks that are eligible to meet these wildfire risk reduction fuel and feedstock requirements to include salvaged vegetation from wildlife clean up, biomass diverted from specified higher fire-risk zones, and biomass from commission-designated sources.

SB 520 (Hertzberg, D) Electrical service: provider of last resort.

Status: Introduced February 21, 2019; awaiting referral.

SB 520 would authorize the PUC to develop threshold attributes, as specified, for a load-serving entity to serve as a provider of last resort to provide electrical service to retail end users in California. The bill would authorize the commission to establish a structure, such as an auction, to determine which load-serving entity should serve as the provider of last resort and what benefits a load-serving entity would receive if selected to serve as the provider of last resort.

Under current law, the PUC has regulatory authority over public utilities, including electrical corporations. Current law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. SB 549 would prohibit the commission from approving any capital structure change or increase in rates for the Pacific Gas and Electric Company unless the Legislature, by statute, authorizes the capital structure change or increase in rates.

SB 772 would require the ISO, on or before June 30, 2022, to complete a competitive solicitation process for the procurement of one or more long duration energy storage projects that in aggregate have at least 2,000 megawatts capacity, but not more than 4,000 megawatts, except as provided. The bill would require that the competitive solicitation process provide for cost recovery from load-serving entities within the California Independent System Operator (CAISO) controlled electrical grid that the CAISO determines is just and reasonable and that takes into account the distribution of benefits from the long duration bulk energy storage.

LEGISLATIVE INTENT

The following bills are those which identify the Legislature’s intent to take action. While substantive language is not contained in these bills as of this writing, we will continue to monitor them throughout the Legislative Session.

AB 281 states it is the intent of the Legislature to enact legislation to require electrical corporations and local publicly owned electric utilities to take certain actions related to electric transmission and distribution lines and equipment in high fire risk areas.

AB 801 (Levine, D) Solar energy systems.

Status: Introduced February 20, 2019; awaiting referral.

AB 801 states that it is the intent of the Legislature to enact legislation to remove obstacles to the expansion of community-shared solar electric generation systems as an option for onsite solar electric generation requirements in California.

AB 877 (Gabriel, D) Energy: solar energy and energy storage systems.

Status: Introduced February 20, 2019; awaiting referral.

AB 877 states it is intent of the Legislature to authorize the Energy Commission to develop criteria for solar energy systems and energy storage systems.

AB 1208 (Ting, D) Energy storage systems.

Status: Introduced February 21, 2019; awaiting referral.

AB 1208 states it is the intent of the Legislature to enact legislation related to energy storage systems.

AB 1698 (Wicks, D) Infrastructure investment and financing.

Status: Introduced February 22, 2019; awaiting referral.

AB 1698 states it is the intent of the Legislature to establish and provide initial funding for the Resilient Activities and Development Agency and the California Resourcient Infrastructure Corporation, as provided.

AB 1733 (Salas, D) California Renewables Portfolio Standard Program.

Status: Introduced February 22, 2019; awaiting referral.

AB 1733 states it is the intent of the Legislature to enact legislation that relates to the California Renewables Portfolio Standard Program.

The California Renewables Portfolio Standard Program requires the PUC to establish a renewables portfolio standard requiring all retail sellers, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources during specified compliance periods. The program additionally requires each local publicly owned electric utility, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the targets established by the program. AB 1762 would state it is the intent of the Legislature to enact legislation to reform the program.

SB 766 (Stern, D) Clean energy electrical grid solutions.

Status: Introduced February 22, 2019; awaiting referral.

Current law establishes numerous programs, such as the Electric Program Investment Charge program, to provide financial assistance to programs for the technological development of energy storage, renewable energy, and integration of renewable energy into the electrical grid. SB 766 states it is the intent of the Legislature to enact legislation to accelerate investment in and deployment of clean energy electrical grid solutions to make the electrical grid more reliable and fire resilient.

The Warren-Alquist State Energy Resources Conservation and Development Act establishes the Energy Commission with various responsibilities with respect to developing and implementing the state’s energy policies. SB 774 states it is the intent of the Legislature to enact later legislation to require the commission to develop and implement a program to deploy local clean energy generation and storage systems throughout California, as specified.

]]>https://www.lawofrenewableenergy.com/2019/03/articles/california/key-energy-related-bills-introduced-in-the-2019-2020-legislative-session/feed/0https://www.lawofrenewableenergy.com/2019/03/articles/california/key-energy-related-bills-introduced-in-the-2019-2020-legislative-session/FERC Approves CAISO Tariff Changes re Generator Interconnection and Deliverability Allocation Procedureshttp://feeds.lexblog.com/~r/RenewableLaw/~3/fAHzCPepROU/
https://www.lawofrenewableenergy.com/2019/02/articles/california/ferc-approves-caiso-tariff-changes-re-generator-interconnection-and-deliverability-allocation-procedures/#respondTue, 26 Feb 2019 16:52:20 +0000https://www.lawofrenewableenergy.com/?p=5826Continue Reading]]>FERC approved new changes to the CAISO tariff on February 19, 2019, with a retroactive effective date of November 27, 2018, that will impact projects in the CAISO’s generator interconnection queue. These changes are the result of a several month stakeholder initiative to enhance the interconnection process and follow a history of reforms intended to promote efficiency in the CAISO’s interconnection procedures in light of changes in the generation development marketplace.

Most significantly, the CAISO’s tariff changes include revisions to the Transmission Plan (TP) Deliverability allocation process in order to award deliverability to customers most likely to proceed towards construction. The CAISO will allocate in the following order: (1) customers with an executed power purchase agreement or customers that are load serving entities serving their own load, (2) customers actively negotiating a power purchase agreement or short listed in an RFO, (3) interconnection customers electing to proceed without a power purchase agreement. This is a departure from the prior provisions that allocated deliverability based on a system that equally weighed three criteria related to financing status: being balance-sheet financed, having a regulator-approved power purchase agreement, and proceeding without a power purchase agreement. The CAISO believes this change better reflects the likelihood of proceeding to construction because projects without a power purchase agreement, in the CAISO’s experience, delay putting construction funds at risk and nearly always withdraw if they do not secure a power purchase agreement. The CAISO has also changed to a similar priority system for allocating any available TP Deliverability in the Annual Full Capacity Deliverability Option process.

Other changes that will impact potential and existing interconnection customers include:

Allowing CAISO to remove network upgrades that are no longer needed from interconnection customers’ financial security postings, even before CAISO issues the next study results;

Requiring interconnection customers to provide copies of their power purchase agreements when demonstrating commercial viability;

Eliminating the criteria required of withdrawing interconnection customers in order to recover their refundable portion of financial security, which should result in more timely refunds;

Aligning the deposits required for customer-requested repowering studies and serial re-studies with current study costs by increasing deposits from $10,000 to $50,000;

Prohibiting fuel-type modifications for interconnection customers that have remained in the interconnection queue beyond the anticipated limits of seven years for cluster process or ten years for serial process;

Applying the commercial viability criteria to all requests for modifications beyond the anticipated tariff timelines;

Requiring projects in the queue beyond the anticipated tariff timelines to have a regulator-approved power purchase agreement to modify their project and retain deliverability (removing the balance-sheet financed option) – this change will not apply retroactively;

Allowing interconnection customers to convert to energy only deliverability status at any time, so long as costs are not shifted to other interconnection customers or transmission owners.

Changes also include revisions to suspension notification provisions to include a good faith estimate of anticipated time of suspension, adding project names to the CAISO’s public interconnection queue, and embedding the generator interconnection study process agreement in the interconnection request. Additionally, the CAISO has added a simple provision clarifying that interconnection customers must go through the new resource implementation process prior to synchronization and a clarification that interconnection customers that have not achieved commercial operation are subject to a material modification assessment for proposed changes, whereas online generators may modify their projects so long as they do not increase their capacity nor change electrical characteristics in a way that threatens reliability.

The CAISO has filed additional tariff changes which they have requested to be approved before the April 1, 2019 opening of the interconnection request window. These changes enumerate specific requirements for interconnection requests to be considered complete and valid. A third set of enhancements was approved by the Board of Governors earlier this month but have not yet been filed with FERC. These changes include clarifications to network upgrade cost responsibilities and framework.

]]>https://www.lawofrenewableenergy.com/2019/02/articles/california/ferc-approves-caiso-tariff-changes-re-generator-interconnection-and-deliverability-allocation-procedures/feed/0https://www.lawofrenewableenergy.com/2019/02/articles/california/ferc-approves-caiso-tariff-changes-re-generator-interconnection-and-deliverability-allocation-procedures/Oregon Adopts Temporary Rules Limiting Solar Siting on Certain High-Value Farmlandshttp://feeds.lexblog.com/~r/RenewableLaw/~3/ec2hG2KemmE/
https://www.lawofrenewableenergy.com/2019/02/articles/oregon/oregon-adopts-temporary-rules-limiting-solar-siting-on-certain-high-value-farmlands/#respondTue, 19 Feb 2019 17:32:37 +0000https://www.lawofrenewableenergy.com/?p=5824Continue Reading]]>On January 29, 2019, the Oregon Department of Land Conservation and Development, the state’s land use agency, filed temporary rules amending the standards for siting solar PV facilities on agricultural lands. Although the Land Conservation and Development Commission stopped short of making the changes permanent in order to further consider stakeholder interests at its May 23, 2019 meeting, the Commission carried forward the bulk of the proposed limitations that we discussed in our previous posts here and here. Notably, the commission opted to retain the prohibition on siting solar on Class I or II, Prime or Unique soils. Under the temporary rules, developers may site solar PV on these particular lands only (1) if the county adopts, and an applicant satisfies, land use provisions authorizing sub-20 acre “dual-use” projects or (2) by securing a Statewide Planning Goal Exception. Written comments are due May 7, 2019, and a public hearing will be held on May 23, 2019.
]]>https://www.lawofrenewableenergy.com/2019/02/articles/oregon/oregon-adopts-temporary-rules-limiting-solar-siting-on-certain-high-value-farmlands/feed/0https://www.lawofrenewableenergy.com/2019/02/articles/oregon/oregon-adopts-temporary-rules-limiting-solar-siting-on-certain-high-value-farmlands/Proposed Changes to CAISO’s Resource Adequacy Frameworkhttp://feeds.lexblog.com/~r/RenewableLaw/~3/nOcJQp01fJg/
https://www.lawofrenewableenergy.com/2019/02/articles/california/proposed-changes-to-caisos-resource-adequacy-framework/#respondMon, 04 Feb 2019 19:34:47 +0000https://www.lawofrenewableenergy.com/?p=5820Continue Reading]]>The CAISO is proposing several changes to the Resource Adequacy framework that will be relevant to generators both within and outside of California. CAISO is in the initial stages of developing their policy changes and it is a good time to voice concerns or offer suggestions before the changes are solidified. We expect more than one straw proposal in this process, as the CAISO works with stakeholders to develop the appropriate policy solutions. Comments regarding this portion of the proposal are due February 6. CAISO’s proposal:

Implement real time bidding requirement for all MWs of import RA – not just those awarded in IFM and RUC (day-ahead market)

Explore expanding must offer obligation for import RA to 24/7

Require 15 minute bidding/scheduling for import RA

Change import RA designations to be resource-specific

Resource Adequacy Availability Incentive Mechanism (“RAAIM”):

Explore moving RAAIM from predetermined hours to event-based triggers

Implement changes that will resolve gaps in current planned outage approval process, including looking at rules that will incentivize submission of planned outages over reliance on forced outages. Two proposed options are under consideration, namely (i) prohibiting resources that are taking planned outages during a month from providing RA capacity, and (ii) authorizing ISO to procure capacity for any days on which resource is on planned outage using standing CSP bids

Limit exemptions from various levels of RAAIM penalties

Consider a RAAIM assessment based on both availability and performance. Currently RAAIM does not assess how resources perform in response to ISO dispatch instructions)

Seek different pricing structures for each type of capacity (i.e., system, local, flexible)

Local Resource Adequacy Needs:

Consider proposals to allow slow demand response to help meet local RA needs

Plan to better outline enhancements to the local capacity technical study to inform stakeholders of availability needs within local capacity areas – including providing additional data

Note that CAISO’s straw proposal part 2 will come out in February with additional changes.

We are happy to provide counsel regarding the impact of the proposed changes on your business and work with you to participate in this process.

]]>https://www.lawofrenewableenergy.com/2019/02/articles/california/proposed-changes-to-caisos-resource-adequacy-framework/feed/0https://www.lawofrenewableenergy.com/2019/02/articles/california/proposed-changes-to-caisos-resource-adequacy-framework/Oregon Department of Land Conservation and Development Issues Staff Report/Clarifications Regarding Proposed Solar PV Ruleshttp://feeds.lexblog.com/~r/RenewableLaw/~3/YWHF_IVJ_v8/
https://www.lawofrenewableenergy.com/2019/01/articles/oregon/oregon-department-of-land-conservation-and-development-issues-staff-report-clarifications-regarding-proposed-solar-pv-rules/#respondFri, 18 Jan 2019 19:02:08 +0000https://www.lawofrenewableenergy.com/?p=5817Continue Reading]]>As a follow up to last week’s post about the proposed rules that would limit the development of solar PV on certain high-value farmland in Oregon, the Oregon Department of Land Conservation and Development issued its staff report on the proposed rules. The staff report provides an overview of the rationale for the proposed changes and clarification on several key issues, including:

Continued availability of Statewide Planning Goal exceptions. The staff report confirms that, if the rules are adopted, project developers may still pursue development on Class I, Class II, Prime, and Unique soils by seeking an Exception to the Statewide Planning Goal 3 (Agricultural Lands). Although this is not a practicable permitting pathway in most instances, the Exception option nonetheless remains.

Treatment of tracts composed of a mix of Class I or II, Prime or Unique soils and “other” soils. The staff report confirms that a county could approve a conditional use permit for a solar PV facility on a tract of land that contains Class I or II, Prime, or Unique soils on the portion of the tract that contains other soils. DLCD staff provided the following example in an email to the rulemaking list serve: “If an 80-acre tract includes 50 acres of class I, II, prime or unique soils and 30 acres of other soil types, those 30 acres of other soil types remain eligible for a conditional use application for commercial solar development.”

Application of rule to solar PV powering onsite facilities. The staff report clarifies that the new limitations only apply to “commercial utility facilities” and not to solar installations that power onsite facilities such as agricultural buildings or electric fences.

The staff report also contains a case study prepared by DLCD staff that is designed to highlight the effect of the proposed limitation related to Class I or II, Prime or Unique soils. The case study (Attachment E to the staff report) provides several example tracts in Marion County that contain 12 acres or more of high-value farmland that is not Class I or II, Prime or Unique (and thus eligible for solar PV siting without a Statewide Planning Goal Exception). The case study also includes an overview map showing the mix of Class I or II, Prime or Unique soils and “other” high-value farmland in that area of Marion County.

As we noted previously, DLCD is currently accepting comments and will hold a public hearing in Salem on January 24. The agenda is available here.